You do not need this until later in the game, when donation to palaces is the focus. It's most useful when donating to places lvl 4 or more. Each city can ship out 16 million in resource in 1 shipment. If you have 10 cities, that's 160 million resources! You can fill a level 1-3 palace in 1 wave!!!
You need at least 2 cities, but you may want to build as many as 10 or more. Build these cities as close together as you can to cut down shipping time.
City 1: See Palace Hub
When use in the system of hubs, this city should not be used to send resources to palaces manually. Carts should be available to fill cities 2-10.
City 2-10: Shipping http://bit.ly/oXElhX
Set wood/stone level at 8 million each. With 16,600 carts, you can ship out all 16 million in 1 shipment. This city can be on water or landlocked.